Oil and gas dominate the exctractive sector in Nigeria, and the country holds 29% of Africa's proven oil reserves. Most of the oil and gas activities are found in the Niger Delta in the southern part of the country. Nigeria is richly endowed with various types of mineral resources. Presently, there are over thirty-four mineral finds in commercial quantity spread across the entire country. Some key mineral resources include gold, coal, bitumen, iron ore, tantalite/columbite, lead/zinc sulphides, barytes, cassiterite, gemstones, talc, feldspar, and marble.
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Nigeria is one of Sub Saharan Africa’s largest economies and relies heavily on oil as its main source of foreign exchange earnings and government revenues. Nigeria is Africa's largest producer of crude oil. In 2015 - total crude oil production was 776,668,000 barrels, a decrease of 2.74% compared to previous year. In terms of exports, a total of 60,557,000 barrels of crude oil was exported. In the gas sector, a total of 3,250,667.66 million standard cubic feet per day of natural gas production was reported by thirty-four (34) companies. This shows an increase of 25.36% when compared with 2014 production. Export gas sales volume increased by 1.72% (16 thousand metric tons) in 2015 (i.e. 951 thousand metric tons in 2014 and 967 thousand metric tons in 2015). Nigeria is richly endowed with various types of mineral resources. The 2015 NEITI Solid Minerals Audit report notes that the government is committed to diversifying the nation's economy; from dependence on oil revenue to non-oil revenues. In September 2016, the Federal Government of Nigeria through the Ministry of Mines and Steel Development, re-launched the Solid Minerals Policy Road Map, aimed at ensuring policy continuity and consistency in the sector. During the year, 2015, the total volume/quantity of actual mineral production was 30,520,114.59 tonne and the total volume/quantity used or sold was 39,272,590.75.
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Laws and Regulations
Applying for Licenses:
The Nigerian Mining Cadastre Office established by law, is the sole Agency responsible for administration of mineral titles and the maintenance of Cadastral Registers for Nigeria. The Nigerian Mining Cadastre Office is empowered by the Nigerian Minerals and Mining Act, 2007 to;
- Consider applications for mineral titles and permits, issue, suspend and upon written approval of the Minister, revoke any mineral title;
- Receive and dispose of applications for the transfer, renewal, modification, relinquishment of mineral titles or extension of areas;
- Maintain a chronological record of all applications for mineral titles in a Priority Register which is to be specifically used to ascertain the priority and registration of applications for exclusive rights or free areas;
- Maintain a general register which is to be used for all other types of applications where registration of the priority is not required;
- Undertake such other activities reasonably necessary for the purpose of carrying out its duties and responsibilities under the provisions of the Nigerian Minerals and Mining Act, 2007 and the Nigerian Minerals and Mining Regulations, 2011.
Types of Mining Titles In line with section 46 of the Nigerian Minerals and Mining Act, 2007 and the Nigerian Minerals and Mining Regulations, 2011, the right to search for, or exploit minerals in Nigeria, is governed by one of the following mineral titles:
- Reconnaissance Permit
- Exploration Licence
- Mining Lease
- Quarry Lease
- Water Use Permit
- Small Scale Mining Lease Reconnaissance Permit
Reconnaissance Licence (Sections 47, 57, and 58 of the Nigerian Minerals and Mining Act, 2007 and the Nigerian Minerals and Mining Regulations, 2011).The Mining Cadastre Office shall within 30 days of receipt of application from any qualified applicant and upon the payment of the prescribed fees, grant and issue a Reconnaissance Permit search for minerals. The permit enables the holder to carry out reconnaissance on a non-exclusive basis. The holder of a reconnaissance Permit is not to engage in drilling, excavation or other sub-surface techniques, and must conduct activities in an environmentally and socially responsible manner and compensate for any damage to crops or property in the course of prospecting. The permit is issued for one year and it is not transferable, but renewable annually. Requirements for Application: Pre-grant conditions Duly completed application forms Description of the work area and the activities to be carried out Attestation of non-conviction of criminal offences under the Act Receipt of payment of the processing fee Evidence of technical competence (section 54 of the NMMA, 2007) Evidence of financial capability (section 54 of the NMMA, 2007)
Exploration Licence (Section 48 and 59 of the Nigerian Minerals and Mining Act, 2007 and the Nigerian Minerals and Mining Regulations, 2011.) The Nigerian Mining Cadastre Office, on receipt of a valid application, is obliged by law to grant and issue an Exploration Licence within 30 days. A licence will not be granted over any land that is subject of an existing Exploration Licence, Mining Lease, Small Scale Mining Lease, Quarry Lease or closed to prospecting/mining activity (e.g. forest reserves, military areas, government development areas, national heritage area etc) and renewable for a further period of 2 terms two years each, provided that the title holder has complied with minimum work commitment/programme and all other legal requirements. The area of land covered by an Exploration Licence shall not exceed 200Km2 i.e. 1000 CUs.
Requirements for Application: Pre-grant conditions:
- Duly Completed application forms Minimum work programme (Detailed) (With COMEG stamp signature) Evidence of financial capabilities (section 54 of the NMMA, 2007) Evidence of technical competence (section 54 of the NMMA, 2007) Irrevocable Consent from land owners/land occupiers – (section 100 of the NMMA, 2007) Attestation of non-conviction of criminal offences under the Act Certified true copy of certificate of incorporation Copy of Form CO2 and CO7 Evidence of payment of processing fees and rents Indicate Minerals to be explored (section 64 of the NMMA, 2007) Pre-Development conditions
Post grant Conditions:
- Environmental Impact Assessment (EIA) (Section 119 of the NMMA, 2007) Compensation Closure plan/rehabilitation plan Reports from state bodies/MIREMCO.
Mining Lease (Section 50, 65 and 66 of the Nigerian Minerals and Mining Act, 2007 and the Nigerian Minerals and Mining Regulations, 2011.)
The Mining Cadastre Office, on receipt of a valid application may grant and issue a Mining Lease within 45 days of the application. The duration of a Mining Lease is 25 years, renewable every 24 years, provided that the holder has complied with minimum work programme and all other legal and regulatory requirements. The lease area shall be determined in relation to the ore body as defined in the feasibility study, in addition to an area reasonably required for the working of the deposit, not exceeding 50Km2 i.e. 250 CUs).
Requirements for Application: Pre-grant conditions:
- Duly Completed application forms
- Pre-Feasibility Report (with COMEG seal and signature)
- Prospecting plan/reserve estimation Extant Exploration licence
- Evidence of Financial capability
- Evidence of technical competence
- Irrevocable consent from land owner(s)/land occupier(s)
- Attestation of non-conviction of criminal offences under the Act
- Evidence of Payment of processing fee
- Certified true copy of certificate of incorporation, Copy of CO2 and CO7,
- Mineral(s) to be exploited (section 64), Area specified to be Surveyed in accordance with provisions of Survey Co-ordination Act (section79), (Survey plan to be submitted)
- Notice to land owner(s) (private or state land) with a response on rate to be paid, (section 102).
Pre-Development conditions (Post – grant):
- Environmental Impact Assessment (EIA) – (section 119),
- Community Development Agreement (CDA) (section 116) A copy to be submitted to MCO and all relevant departments in the Ministry
- Compensation – (section 107) Mine Closure plan/Rehabilitation plan – (section 61),
- Reports from state bodies/MIREMCO.
Quarry Lease: (Section 51 and 77 of the Nigerian Minerals and Mining Act, 2007 and the Nigerian Minerals and Mining Regulations, 2011). The Mining Cadastre Office, on receipt of a valid application, shall grant and issue to the applicant a Quarry Lease within 45 days. The duration of a Quarry Lease shall not exceed five (5) years and may be renewed every five years as required, provided the renewal application is made within (3) months before the expiration of the lease. The area shall not exceed 5Km2. (25CUs).
Requirements for Application: Pre-grant conditions:
- Duly completed application forms
- Pre-Feasibility Report (with COMEG seal & signature)
- Evidence of Financial capabilities (section 54 of the NMMA)
- Evidence of Technical competence of Technical Person(s) (Section 54 of NMMA, 2007)
- Irrevocable Consent from land owner(s)/land Occupier(s)-(section 100 of the NMMA, 2007), Attestation of no conviction of criminal offence under the Act (section 53 of the NMMA, 2007)
- Certified True Copy of Certificate of Incorporation, Copy of Form CO2 and CO7
- Evidence of payment of processing fees, Indicate Minerals to be Exploited
- Area specified to be surveyed in accordance with Coordination Act (section 79 of the NMMA, 2007) (Survey plan to be submitted)
- Notice to land owner(s) (private or state land) with a response on rate to be paid – (section 102 of the NMMA)
- Indicate Mineral(s) to be exploited (section 64 of the NMMA, 2007).
Pre-Development conditions (Post-Grant):
- Environmental Impact Assessment (EIA) – (section 119)
- Community Development Agreement (CDA) (Section 116)
- Compensation – (Section 107), Submit Mine closure plan/rehabilitation plan- (section 61)
- Reports from state bodies/MIREMCO.
Small Scale Mining Lease (Section 49 of the Nigerian Minerals and Mining Act, 2007 and the Nigerian Minerals and Mining Regulations, 2011). The Mining Cadastre Office, on receipt of a valid application, grant and issue a Small Scale Mining Lease (SSML) within 45 days. An SSML shall not be granted in respect of any area within an exploration licence, mining lease or quarry lease to any person except the holder of an exploration licence, quarry lease or mining lease covering the area. The duration of an SSML is five (5) years and is renewable for further periods of five years provided that the minimum work obligations have been fulfilled. The area of land for an SSML shall not exceed 3Km2. When the level of operations of a SSML exceeds any of the criteria established in the definition of SSML, the holder shall convert such a lease into a mining lease by submitting a written application to the MCO.
Water Use Permit (Section 52 of the Nigerian Minerals and Mining Act, 2007 and the Nigerian Minerals and Mining Regulations, 2011). The area of land in respect of which any water use permit (WUP) is granted shall not exceed the area reasonably required for the purpose of the permit as defined in the regulation. A WUP will remain in force as long as the mining lease, SSML, or quarry lease for which the water use permit was granted remains valid. The Permit is issued only for mineral title purposes.
Shapes of Licences and Lease: In accordance with the Nigerian Mineral & Mining, Regulations 2011 (NMMR) applications for Exclusive Licence and leases must be submitted in conformity with the allowed geometric shapes of polygons, and must be regular and parallel to coordinates system used in national topographic maps.
The polygons should have a minimum dimension which is called a CADASTRAL UNIT (CI), also simply referred to as SQUARE. A licence polygon should always be made up of a certain number of Cadastral Units (CU), or squares. Consequently, the dimensions of the sides of any polygon corresponding to the licence area will always be multiples of the size of the cadastral unit. The CUs must be adjoining by the sides not the edges (i.e. placed side by side to each other). The polygons cannot also be “floating” or placed anywhere. They must be located coherently with predefined and standardised grid.
For Nigeria, the cadastral topographic maps of 1:50,000 scale are divided by a grid of 15 seconds by 15 seconds (15” x 15”), using the Geographic Coordinate System (latitude /longitude: degree/minute/seconds). The average area of one CU (square) of 15” x 15” is roughly 20 Hectares. That means a polygon of one minute by one minute (1’x1’) will have 16 CUs (squares) with area of about 300 Hectares (or3 Km2). The coordinate values limiting the licence polygons can be obtained by direct readings from the cadastral maps (topo-sheets of 1:50,000 scale), or by readings from the field using the Global Positioning System (GPS) with the correct settings (i.e. Longitude/Latitude, WGS 84-Minna Datum).
Applicants are required to submit their applications for licences together with coordinates (which is a major criteria) of either the corners of the entire polygons or CUs applied for or of the centre of the CUs. The coordinates will therefore have an incremental rate of 15 seconds (15”) on both the x and y axis of the polygons. There is also the need to submit survey plans for lease applications. The Mining Cadastre Office will generate the license plans upon acceptance of the application.
Licence/Permit Application Process: Application forms can be obtained from the Mining Cadastre Offices or downloaded from the agency’s website: www.miningcadastre.gov.ng Submit completed application form (in 3 copies) along with the necessary documents (as specified in the application form) and processing fees to the MCO in line with the provision of the Nigeria Minerals and Mining Act, 2007 .
Submitted application shall be assigned with an identifying code and registered with date, hour and minute in the priority register duly signed and a copy to be given to the applicant as acknowledgement of the application. Upon submission and receipt of an application for a Mineral title MCO shall notify land owner(s)/occupier(s) in order to obtain an irrevocable consent to be submitted back to MCO within 7 days. Incomplete or wrongly completed application shall be rejected without refund or processing fee. Where application requires minor amendments (not coordinates), the applicant shall be duly informed to effect the necessary corrections within a period of 5 working days; and if no response within the specified period, the application shall be rejected without any refund. After, the MCO shall input spatial and non-spatial data of the application into its system. The application is further evaluated and recommended If granted a license/permit, the applicant shall be informed and be given 2 weeks within which to pay the Annual Service Fee, a pre-requisite among other obligation before collection of the license/permit or lease. If the applicant fails to pay the Annual Service Fees within fourteen (14) days after collection of the notification of grant, the grant shall automatically be withdrawn.